Summary: Lack of justice in the US patent system, which became a virtual cash cow of rogue actors that produce nothing and are taxing everything, as long as the system lets them get away with it

THE previous post may have seemed harsh on Patently-O, but having followed the site for many years, we did notice a somewhat notable bias (unlike before). Academia is supposed to view things from an independent and open-minded viewpoint, but sometimes it gets seduced into one side of the debate — often the side that pays better. The other day Patently-O published a post for Tim Holbrook, Professor of Law at Emory University School of Law.

“In our view, Texas gets far too much of the ‘action’ when it comes to patents, partly by disregarding the rules, ignoring precedence, and inviting patent trolls to judges that are notorious for pro-plaintiffs (or anti-defendants) bias.”The post speaks of Life Technologies Corp. v. Promega Corp. (covered here before) and says it “may reflect a shift away from the use of the presumption in interpreting particular provisions within a particular statute once the extraterritorial reach of that provision already has been confirmed.”

As this case was covered here before, we don’t wish to re-introduce it (look up Life Technologies Corp. as it’s all over the Web, notably this patent case). Patently-O recently wrote about another case — one in which Crouch intervenes. He wrote: “There’s a ton of briefing between the parties and other amicus on whether, or not, Texas state courts should recognize a patent agent-client privilege.”

“The article at hand shows how the patent system has basically become the game of a bunch of law firms with proprietary software, not sole inventors like the mythology goes.”In our view, Texas gets far too much of the ‘action’ when it comes to patents, partly by disregarding the rules, ignoring precedence, and inviting patent trolls to judges that are notorious for pro-plaintiffs (or anti-defendants) bias. SCOTUS urgently needs to put an end to it. The whole situation has damaged the perception of patent justice and generally discredited much of the system, demolishing public consent to it. How many people in the US still view patent law — with all the patent trolls they keep reading about — as desirable? If very few, then maybe policy is the problem, or the push towards patent maximalism where public interests are altogether disregarded. The EPO has recently accomplished the same thing — to the point where 0% of EPO stakeholders support the EPO's management and an identical number (it doesn't get any lower than this) of well-paid EPO staff say they support their management.

“Huge corporations with tens of thousands of patents each and some outside law firm/s command the lion’s share of patents.”The article at hand shows how the patent system has basically become the game of a bunch of law firms with proprietary software, not sole inventors like the mythology goes. Huge corporations with tens of thousands of patents each and some outside law firm/s command the lion’s share of patents. They do everything in bulk and can crush any small company that ‘dares’ sue, unless it’s a troll (in which case there’s nothing to sue it over). To quote a portion: “As an attorney, your primary goal should be to provide competent representation for your clients. Both the U.S. Patent and Trademark Office and state ethics rules mandate that lawyers commit themselves to competence. This means that attorneys must have the requisite “legal knowledge, skill, thoroughness and preparation” to handle each case, according to the American Bar Association’s Model Rules of Professional Conduct, Rule 1.1.”

It also says: “Legal technology is here to stay. Don’t miss out on the game-changing benefits various softwares and platforms could have on your firm. Your clients — and your colleagues — will appreciate increases in efficiency, and customer acquisition will follow suit.”

“We heard similar stories about the EPO; EPO stakeholders who chose not to waste money on law firms were urged to do so by the EPO and were repeatedly rebuffed by the EPO — to the point where the whole process (for one single patent) cost as much as a whole house!”How many people other than law firms can afford such software? It seems like the whole system has become the den of few law firms rather than actual inventors who can follow instructions and get patents granted. This new book, “Patent Office Litigation,” is in fact composed by a law firm, not actual inventors. It says a lot about what the patent system became in the US. We heard similar stories about the EPO; EPO stakeholders who chose not to waste money on law firms were urged to do so by the EPO and were repeatedly rebuffed by the EPO — to the point where the whole process (for one single patent) cost as much as a whole house! It got so serious that one single case was eventually escalated to British and EU-level authorities, to no avail (because the EPO enjoys immunity).

Going back to Patently-O, it’s made apparent that interacting with the patent system in the US is a hard job; “patent infringement complaints,” it says, “like all others, must comply with Iqbal and Twombly, which require pleading factual material that, if taken as true, plausibly states a claim upon which relief can be granted.”

Sounds like a time-consuming process. Here is the entire relevant part:

As you know, it used to be you could file a complaint for patent infringement using Form 18, which barely said anything beyond “Plaintiff owns a patent, and you infringe it.” Nowadays, patent infringement complaints, like all others, must comply with Iqbal and Twombly, which require pleading factual material that, if taken as true, plausibly states a claim upon which relief can be granted.

A while back, I wrote about how this is going to be difficult to do in some cases: how do you gather a Rule 11 basis to plead plausible facts when, for example, the claimed method is practiced by a corporation inside its well-guarded factory?

A recent decision, Harvard v. Micron (17-11249, D. Mass. Jan. 31, 2017) (available here), gives a real world example of this. The original complaint alleged that the patented method was commonly used to perform the accused process. The defendant moved to dismiss, asserting that this was not enough to make it “plausible” that, in fact, the defendant used the method.

The last part (above) sounds like a lawyers’ trick to just buy more time and cost more money (to the plaintiff). And if the above wasn’t compelling enough an example of systems where only lawyer win (more time means more money to them, at clients’ expense), get this: the patents system now attracts not only patent trolls but also frauds and charlatans, such as in this example:

NOV initially refused to produce the ACA, instead producing only a “Assistant Secretary’s Certificate,” which assigned only “physical assets.” After being forced to produce the ACA, Omron renewed its motion to dismiss for lack of standing. The district court agreed that that NOV could not prove ownership of the ’142 Patent as of the filing date of this case, and dismissed the case, with prejudice, for lack of standing.

In other words, the plaintiff turns out to now even ‘own’ the patent (or not sure about it). How did they even get this far? And what if there was an out-of-court settlement, agreed upon patents that are basically vapour? We saw examples like these before and it should be regarded or treated as a criminal offense, akin to extortion rackets. █

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